Multiemployer pension measures cleared for relief bill vote

Legislation to help struggling multiemployer pension funds is to remain in the COVID-19 relief measure headed for a Senate vote this week.

The package also calls for some funding relief for single-employer plans, through extended amortization periods and pension interest rate smoothing changes.

The pandemic relief package was approved by the House along party lines Feb. 27. Its pension provisions were at risk of being stripped until the Senate parliamentarian ruled late Monday that they fit the rules for a budget reconciliation process that allows Democrats to prevail under a simple majority.

"I'm pleased our pension protection package will remain in the critical relief bill. This economic crisis has hit already struggling pension plans like a wrecking ball, and the retirement security of millions of American workers depends on getting this package across the finish line," Senate Finance Committee Chair Ron Wyden, D-Ore., said in a statement after the parliamentarian's ruling.

With that ruling, said Michael Kreps of Groom Law Group, "there is a clear path to getting this across the finish line."

The relief package calls for a "special financial assistance" program at the Pension Benefit Guaranty Corp. to make grants to financially troubled multiemployer plans, with the estimated $86 billion in funds coming from the Treasury Department. More than 100 plans would be eligible, including those in critical and declining status, underfunded ones with more retirees than active workers, and plans already insolvent or that have suspended benefits. PBGC premiums for multiemployer plans would increase to $52 a participant, beginning in 2031.

For single-employer plans, in addition to the temporary funding relief and related measures, the bill calls for freezing cost-of-living adjustments for overall contributions to defined contribution plans and for the maximum annual benefit of a defined benefit plan, beginning in 2031.

It also has special funding rules for community newspaper pension plans that allow for a longer funding period and a higher interest rate for measuring liabilities.